Execs tread wary in digital dawn

Analysts at PricewaterhouseCoopers expect the convergence between technology, entertainment and other areas to drive a new technology boom, but executives won't repeat the mistakes of the internet bubble, they warn.

By
Macworld staff
, | 31 May 06

PricewaterhouseCoopers expects the convergence between technology, entertainment and other areas to drive a new technology boom.

But they don't believe it will be a boom/bust bubble as seen when internet stocks collapsed. They think that executives have learned to be more careful as a result of that bust, and are "approaching the current round of mergers and acquisitions more strategically."

They also note that this new boom time is being driven by products and offerings that are commercially viable already, while much of the internet bubble-bursting moments were caused by too much hype. In convergence culture, the consumer is king, they added.

"The success of this second tech boom is dependent upon strategic partnerships that fulfill emerging consumer needs," said Bill Cobourn, partner and global technology industry leader, PricewaterhouseCoopers.

The analysts expect a move toward consolidation between firms as they rush to make profit from the chance, the report claims.

A survey of top IT CEOs identified software developers as the most likely targets for acquisition (49 per cent), followed by business information content developers (40 per cent), wireless companies (19 per cent), entertainment content developers (18 per cent) and consumer electronic device makers (15 per cent).

Almost half the CEOs surveyed believe digital convergence revenue is more likely to be generated through alliances than by mergers and acquisitions.